steve nelsen executive director leoff plan 2 … nelsen_monday_south...“the next step in mans...
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Steve Nelsen Executive Director LEOFF Plan 2 Retirement Board
“Late pay raises are one way to fatten workers' state pensions” The Columbian - Clark County, Washington
“Public pensions are a ticking time bomb for governments”
Pensacola News Journal – Pensacola, Florida
“Taxpayers will be on hook for public pensions”
The Press-Enterprise - Riverside, California
“Cities struggle with rising cost of police, firefighter pensions”
Orlando Sentinel – Orlando Florida
“Retire-rehire move costs millions”
The Detroit News – Detroit, Michigan
“New Jersey’s ‘$100K Club’ Of Retirees Grows 50 Percent In
Two Years” CBSNewsYork – New York, New York
“CalPERS to ask taxpayers to pay more to cover state
workers’ pensions” Sacramento Business Journal – Sacramento,
California
“U.S Pension Crisis a Huge Obstacle for the Economy” Business 2 Community – Internet Blog
“Pension crisis could lead to municipal bankruptcy” Sun Sentinel - Fort Lauderdale, Florida
“Hundreds of Retiring Public Workers "Spiked" Their
Pension Benefits” Hawaii Reporter – Honolulu, Hawaii
Public Pension Plans are Poorly Managed
Public Employee Benefits Are Overly Generous
Taxpayers Are Facing A Huge Tax Increase to Pay for Pensions
Converting to a Defined Contribution Plan Will Save Money
“The next step in mans evolution
will be the survival of the
wisest.” ― Deepak Chopra
“All truth passes through three stages. First, it is ridiculed, second it is violently opposed, and third, it is accepted as self-evident.” -Arthur Schopenhauer, German philosopher, 1788-1860
A well-designed and well-managed defined
benefit pension plan is the most powerful financial tool for providing individual
retirement security.
The purpose of a pension plan is to attract and retain desired employees.
No plan is perfectly designed or perfectly managed.
Following best practices is the only way to successfully design and manage
a pension plan.
Benefits to Plan Members: Professional Investment Pooled Investment Shared Longevity Risk An Optional DC Component
Benefits to Plan Employers: More Benefit for Same Cost as DC Better for Recruiting and Retaining
Pension Spiking Retirees Returning to Work Increasing Costs Rising Cost of Medical Expenses Unaffordable Costs Lack of Member Contributions Poor Funding Ratio Members Retiring with 100% or More of Their Salary Retirees Earning More Than $100K/year Investment Performance Failing to Meet Benchmarks Failure of A Particular Investment Administrative and Investment Costs Prior Plans & Neighboring Plans with Problems
Benefits Funding Investment Administration
Employer pension contributions that pay the full ARC, and that at least equal the normal cost Employee contributions to help share the plan cost
Benefit improvements that are actuarially valued before adoption and properly funded upon adoption
COLAs that are granted responsibly Anti-spiking measures that ensure actuarial integrity and transparency Economic actuarial assumptions that can reasonably be expected to achieved long term
Explain to taxpayers how they benefit from pension plans.
Explain the economic benefits, not just the hiring/retention benefits.
Provide reasonable benefits at an affordable cost.
Operate in a way that creates confidence in the management of the plan.
Share risks with the taxpayers on an equal basis.
Create plans that private workers can participate in.
Communicate transparently about risks and costs. Act appropriately when problems arise (own it and fix it). Create a partnership between members, employers and taxpayers.
Steve Nelsen, Executive Director LEOFF Plan 2 Retirement Board (WA State)
[email protected] (360) 586-2323